Wall Street Lowered Outlook for China's Stocks on More Risks Coming in 2025

 

 

Wall Street’s outlook on China’s stock market has turned cautious, with analysts from major firms like Goldman Sachs and Morgan Stanley lowering their expectations amid signs of slowing economic growth.

 

 

Goldman Sachs recently reduced its year-end 2025 target for the MSCI China Index from 84 to 75. Similarly, Morgan Stanley lowered this index target to 63 by the end of 2025. Contrary to the status quo, they both were optimistic about China's stocks following China's first round of stimulus in September.

 

 

The MSCI index has had a falling trend since it surged after September's stimulus, making banks believe that China will not adopt any bigger fiscal stimulus than the September's one in the future. As a result, two banks cut the outlook for China's stock market.

 

 

 

According to Morgan Stanley, the fiscal stimulus measures launched by Beijing in September were unlikely to improve China's persistent weaknesses: weak consumption and sluggish real estate stocks, expecting corporate earnings and market valuations to decline.

 

 

Analysts from Goldman Sachs highlighted the potential tariff risk as a turning point and a pivot of Chinese stocks. U.S. President-elect Trump's proposal to impose high 60% tariffs on Chinese exports would threaten the Chinese market. Details of the tariffs and China's response to them will constantly change the outlook for the Chinese market. Goldman Sachs advised investors to monitor the tariffs closely, emphasizing that it would dynamically adjust its outlook on the China market.